Management approach

Material topic: Human rights & fair labor practices

[GRI 3-3]

Diversity, inclusion and respect are core pillars of a talent strategy designed to attract and develop people from all backgrounds. A committed and empowered workforce is critical to business success, and Lenzing acts to provide equal opportunities for employment, learning and development. The company seeks to create an open-minded and inclusive environment by proactively fostering ethical ways of working in compliance with high internal standards, as well as principles outlined by international regulatory bodies. Lenzing continues to adhere to and uphold human rights and fair labor practices in all aspects of the global working environment.

Actual and potential negative and positive impacts, risks and opportunities

Positive

• Good labor practices promote staff safety and wellbeing and ensure healthy and satisfied employees
• Launch of a clear and appealing purpose with people focus at its core to deliver the “Better Growth” strategy
• Enabling personal success and contributing to the growth and success of the company
• Diversity promotes the quality of business decisions and contributes to the company’s resilience
• Competitive advantage through a committed workforce
• Development of a corporate culture that is characterized by openness and mindful interactions
• Definition of related targets of social sustainability
• Global goal and talent management processes in place
• Global Skill Matrix and Functional Competency Frameworks in order to offer the right learning and development opportunities to employees
• Comprehensive set of business policies that set clear standards and processes regarding the behavior of leaders and employees

Negative

Own activities:

• Risk of losing employees with high potential
• Risk of reducing the engagement and productivity of employees
• Risk of negatively impacting on the mental health of leaders and employees
• Risk of not being able to hire and train a successor in time

Business relationships:

• Risk of discrimination and other possible negative impacts on human rights
• Potential regulatory and corporate reputational risks
• Risk of failing to attract future talent or losing employees due to a lack of initiatives on diversity, equity and inclusion
• Risk of not meeting regulatory requirements with regard to the share of different genders in executive management
• Risk of losing know-how through demographic change

Policies and commitments

• Local Labor laws
• Local Employee Terms and Conditions
• 17 UN Sustainable Development Goals
• 10 principles of the UN Global Compact
• Women’s Empowerment Principles
• Lenzing’s Purpose, Culture & Strategy
• Policy on Human Rights and Labor Standards
• Policy on Equity, Diversity & Inclusion
• Lenzing Group Reward Guideline
• Global Code of Business Conduct
• Policy for Safety, Health and Environment
• Sustainability Policy
• Lenzing Sustainability Targets
• HR Strategy
• Global Anti-Bribery and Corruption Directive
• Global Whistleblower Directive
• Global Compliance Investigation Directive
• Anti Money Laundering Group Directive
• Global Recruitment Guideline
• Global Job Evaluation Guideline
• Lenzing Group Short Term Incentive Plan
• Global Salary Administration Guidelines
• Global Learning & Development Guideline
• Global Performance Management Guideline
• Global Guideline for Creating a Job Description
• Modern Slavery Act Transparency Statement (UK only)

Actions taken

• Launch of the Equity, Diversity and Inclusion (EDI) Policy supported by explainer videos in all languages
• 3^rd party audits on social sustainability topics conducted for several sites
• Launch of Employee Resource Groups (ERGs) Women@Lenzing and Multicultural@Lenzing
• Provide insightful talent data to support employee development and build effective career paths
• Roll-out of skill matrix concept and IT tool at Lenzing site started; development of skills on multiple sites globally ongoing
• Eye-to-eye partner for local unions, works councils, and other workforce representatives
• Consolidation of the performance and talent management processes for all white-collar employees
• Establish structured performance management processes with regular employee feedback
• Focus on digital learning through a globally available catalog of over 165 optional eLearning courses in German, English, Portuguese and Chinese over 60 optional classroom training courses (virtual and face-to-face) covering a range of topics from business to personal development and wellbeing
• Regional social projects
• Compensation & benefit benchmarks and grading systems
• Application of 4-eye principle
• Whistleblower system and investigation directive

Sustainability targets, measures and progress

• No cases of discrimination or human right abuses, based on Discrimination ILO 111 Article 1, were reported.
• No strikes at any Lenzing production facility
• “Social standard” target
• “Equity, Diversity and Inclusion” target

Stakeholders

• Employees
• Customers
• Local communities
• Rating agencies
• Brands & retailers
• Certification bodies
• Suppliers

Responsible

• CEO
• SVP Corporate Human Resources

Supporting

• Corporate Communications & Public Affairs
• Social Sustainability

Material topic: Health & safety

[GRI 3-3]

A safe working environment with supportive health systems for Lenzing’s employees are as critical to business success as eco-responsible products and production processes. The Lenzing Group strives to ensure that no direct or indirect employees, contractors or visitors come to harm at Lenzing’s sites or while working at external locations. This ethos extends to the impact on the communities in which Lenzing operates. In keeping with the principle that all injuries and occupational illnesses can be avoided, workplace programs have been implemented that promote health-conscious behaviour.

Actual and potential negative and positive impacts, risks and opportunities

Positive

• A safe work environment, and supportive health measures for employees fosters an engaged and productive workforce
• Upcoming generations of talent are likely to value purpose, fulfilment and social responsibility more highly than ever before
• Educating, training and motivating employees to behave safely and to care for each other
• Providing occupational medical services to ensure that employees are fit and well, offering health surveillance to support workplace risk management and employee health screening to support health and wellbeing
• Protecting people based on the belief that every adverse event, injury and occupational illness is preventable

Negative

Own activities:

• The nature of Lenzing’s business is such that Lenzing’s workforce can be exposed to risks that impact their safety and wellbeing
• Recognising that Lenzing’s working environments can impact and potentially expose its workforce at operated assets to potential health and wellbeing impacts

Policies and commitments

• “Better Growth” strategy
• HR Strategy
• Policy for Safety, Health and Environment (SHE)
• ISO 45001:2018 certification
• Global Code of Business Conduct
• Global Supplier Code of Conduct
• Health guiding principle (“House of Health”)
• Life-Saving Rules Group Guideline
• Clean & Hygiene Guideline

Actions taken

• Health Climate Index survey for employees to develop a work climate where everybody feels comfortable
• “ZUKUNFT SICHERn” (Safe Future) safety project at the Lenzing site
• COVID-19 care measures: offering vaccinations, tests
• Regularly held safety webinars
• Safety, Health & Environment Action Reporting System
• Management of risk processes
• Regular Global QESH meetings with management review
• Regular meetings of health and safety committees at every production site
• Heartbeat for Safety Program
• Safety Walks and Talks
• Provision of health services
• eMotion program with “Moveeffect” app

Sustainability targets, measures and progress

Lenzing Group target: To reduce the Total Recordable Injury Frequency Rate (TRIFR¹) to 0.3 by 2025.

Stakeholders

• Customers
• Employees
• Contractors
• Local communities
• Enforcing authorities
• Certification bodies

Responsible

• Managing Board
• VP Global QESH
• SVP Corporate Human Resources
• Senior leadership roles
• Health & safety is a shared responsibility through all layers of the organization

Supporting

• Corporate Communications & Public Affairs